Federal Circuit Emphasizes Preemption and Realization as the Path to Eligibility:

On September 13th the Federal Circuit issued a very encouraging decision in the MCRO, Inc. v. Bandai Namco Games America appeal (decision available here). The panel reversed a judgment on the pleadings entered by a Central District of California Court invaliding U.S. 6,611,278 (the ‘278 patent) as claiming an abstract idea under a judicial exception to §101. The decision drafted by Judge Reyna and joined by Judges Taranto, and Stoll, found the claims of the ‘278 patent directed to a patentable process under §101.[1]

The decision focuses heavily on the question of whether the recited subject matter preempts all methods of performing the claimed process, which revolves around a rules-based automated method for synchronizing dialog with animated characters. The Court finds that the recited subject matter does not preempt all methods, and thus disposes of the Alice-based §101 analysis in the first step by determining that the claims are not directed to an abstract idea (citing Enfish[2], among other cases).

The District Court decision also discussed preemption, but came to the opposite conclusion on patent eligibility. The District Court determined that the claims preempted all methods of rule-based synchronization of dialog with animated characters, by incorrectly determining that the claimed rules were generic. The Federal Circuit admonished the lower court against oversimplifying the claims when making an abstract idea determination, and when on to determine that the claims were limited to rules with specific characteristics.[3] Judge Reyna emphasized this point in stating “[w]hether at step one or step two of the Alice test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps.”[4]

In addition to the focus on preemption, Judge Reyna emphasized how the recited subject matter realized the invention discussed within the specification.[5] The decision acknowledges that the lower court correctly identified the point of the invention, which is to improve on prior art automated synchronization methods through the use of rule-based synchronization. The decision continues highlighting the failure of the lower court to recognize the claims as reciting a specific implementation of the discussed invention, rather than simply reciting the abstract idea of using rules to synchronize dialog with animated characters.

The decision intertwines the preemption and realization concepts as follows:

The abstract idea exception has been applied to prevent patenting of claims that abstractly cover results where “it matters not by what process or machinery the result is accomplished.” Morse, 56 U.S. at 113; see also Mayo, 132 S. Ct. at 1301. “A patent is not good for an effect, or the result of a certain process” because such patents “would prohibit all other persons from making the same thing by any means whatsoever.” Le Roy v. Tatham, 55 U.S. 156, 175 (1853). A patent may issue “for the means or method of producing a certain result, or effect, and not for the result or effect produced.” Diehr, 450 U.S. 175, 182 n.7. We therefore look to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016) (“Enfish”)[6]

This portion of the decision may prove very useful in arguing that computer-implemented processes that implement a new method are not abstract ideas. The Court specifically distinguishes the claims of the ‘278 patent versus Flook, Bilski, and Alice by recognizing that the claims recite a different method of performing synchronization versus the admitted prior art.[7] The decision opens the door to asserting patent elibibility for any claims reciting a computer implementation of a new method to perform a certain function, in contrast to merely automating a well-known process.

Patent owners can hope that this decision signals a new focus by the Federal Circuit to redefine how the Alice/Mayo test is applied to computer-implemented inventions. The decision has the potential to change how both District Courts and the Patent Office views and evaluates computer-implemented inventions. At a minimum, patent practitioners should pay careful attention to how the Court analyzed the claims and the specification in drafting case to survive §101 scrutiny.

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